Translated material
Crisis cycle
How did the devaluation of the yuan in China led to the euro 82 rubles? Two simplest chains
In the world stock markets “Black Monday”: in the morning, Asian stock indices collapsed, after them - European, and then American. Investors have been waiting for something like this for several weeks: the unexpected devaluation of the Chinese yuan and the fall in the cost of raw materials revealed revaluation of other exchange goods. “Medusa” on two simplest chains explains what happened, and how the devaluation of the Chinese currency is related to the fact that the euro in Moscow is already 82 rubles.
Chain number 1
China devalued its currency, albeit a little, but unexpectedly.
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Investors realized that rumors about slowing down the growth rate of the Chinese economy may well be a reality.
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China is the main buyer of raw materials in the world. If his economy does not grow or grows slower than planned, it will need much less metals, oil and other raw materials. Realizing this, investors immediately began to sell raw materials contracts.
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The oil of the American brand WTI fell below $ 40 per barrel, the European Brent so far has been holding around $ 43, but still there have been no such low prices since the acute phase of the 2008-2009 crisis. In general, raw materials were so cheap in the 21st century.
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The sale of raw materials launched a new round of crisis in raw materials, primarily in Russia.
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The dollar on the Moscow Exchange costs more than 70 rubles, the euro - more than 82 rubles.
Chain number 2
China devalued its currency, albeit a little, but unexpectedly.
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Investors realized that rumors about slowing down the growth rate of the Chinese economy may well be a reality.
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China is the main engine of the world economy. If he has something wrong, not so and all over the world selling with China. Bad news from China prompted cautious investors to pick up money from unreliable assets (shares) and transfer it to reliable (bonds and gold). European stock indices in the day lost 5%, the American Dow Jones opened with a four percent fall - in general, the outflow of money from the stock market felt around the world. In general, from the stock markets since the announcement of the devaluation of Yuan, five trillions of dollars flowed.
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The collapse of markets means instability in the global economy. In such conditions, the US Federal Reserve System is unlikely to decide to increase the base rate (that is, the cost of money), which could happen in September. Investors have been preparing for this decision for a very long time and bought up dollars in advance (if the rate increased, there would be less dollars in the global economy, their value would have grown).
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When investors realized that there would be no increase in the rate, they rushed to sell the dollars purchased for the future. As a result, only the euro went up to the dollar by one and a half percent per day (for the strongest currencies in the world it is very significant), although the European currency was cheaper all year.
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The difference between the dollar and the euro in Russia exceeded 12 rubles, although in recent weeks it amounted to 6-8 rubles.